As the markets tanked at the beginning of 2016, what were the short sellers up to? Perhaps not surprisingly, short interest was on the rise for most of the top six most heavily shorted stocks traded on the New York Stock Exchange. In fact, Alcoa, Freeport-McMoRan and Vale saw double-digit percentage increases between the December 31 and January 15 settlement dates. However, the most shorted NYSE stock, Chesapeake Energy, bucked the trend.

Note that the 10 most shorted NYSE stocks all had more than 100,000 shares short at the end of the most recent settlement period.

Short interest in Chesapeake Energy Corp. (NYSE: CHK) started off the year with a more than 4% drop to more than 230.91 million shares. That was the second consecutive period of decline, and it was 35.3% of the company’s float. The days to cover slipped to about 10 as the daily average volume rose to a three-month high. Chesapeake shares were downgraded early in the year. Short sellers watched the stock retreat more than 19% between the settlement dates, while the S&P 500 was down more than 6%. Shares closed most recently at $3.28, up from a recent multiyear low of $2.69. The 52-week high of $21.49 was seen almost a year ago.

Sprint Corp.’s (NYSE: S) short interest grew more than 3% in the first weeks of the month, the fifth period in a row with an expanding number of shares short. The most recent reading of around 224.31 million was 36.0% of the float, as well as the greatest number of shares short in at least a year. The days to cover dropped from more than 20 to about 13. During the period, we recognized Sprint as one of America’s most hated companies, and the share price ended the two-week period about 18% lower, despite being up around 4% at one point. The stock closed Wednesday at $2.92, in a 52-week trading range of $2.18 to $5.45.

After ending a four-period streak of rising short interest in the previous period, the number of Vale S.A. (NYSE: VALE) shares short resumed its climb, jumping almost 11% to more than 217.78 million. At the most recent average daily volume, it would take about nine days to cover all short positions. The stock was hitting 52-week lows during the market sell-off at the beginning of the year. The miner’s shares fell about 30% but regained about 5% by the end of the short-interest period. The stock hit its multiyear low of $2.13 this week, but ended Wednesday at $2.31. The 52-week high is $9.14.
Petróleo Brasileiro S.A. (NYSE: PBR), better known as Petrobras, saw the number of its shares short grow by 16.7 million in the two weeks to more than 196.39 million. That was again the highest level of short interest in the past year. The days to cover fell to about seven as the average daily volume increased. Petrobras is one of the oil companies cutting the most spending. Its shares pulled back more than 24% in the first two weeks of the year. They closed most recently at $3.13, down more than 27% year to date. The 52-week high of $10.55 occurred last May, while the $2.71 low was seen last week.

The short interest in Freeport-McMoRan Inc. (NYSE: FCX) surged another 15% more between the most recent settlement dates to more than 177.95 million shares. That was 15.6% of the miner’s float, and it would take about two days to cover all short positions. The number of shares short has more than doubled since the middle of November. The stock hit new 52-weeks lows as the markets tanked in early January. The share price ended the short interest period about 34% lower. The stock has recovered about 10% since and closed most recently at $4.66. The latest 52-week low is $3.52, well short of the 52-week high of $23.97.

A nearly 18% surge brought Alcoa Inc.’s (NYSE: AA) number of shares short to more than 164.95 million at the end of the two-week period. That was the fourth straight period of rising short interest, up to some 12.9% of Alcoa’s total float. The days to cover shrank from six to about three. Fourth-quarter earnings were better than expected. The share price tumbled more than 27% in the two weeks, while the Dow Jones Industrial Average slipped more than 6%. The earnings beat did not stop shares from falling to a recent 52-week low of $6.14. They closed at $6.95 on Wednesday, down from a 52-week high of $17.10

Rounding out the top 10 were Transocean Ltd. (NYSE: RIG), Pfizer Inc. (NYSE: PFE), General Electric Co. (NYSE: GE) and AT&T Inc. (NYSE: T). Among these, only Transocean saw rising short interest during the period. Note that Fiat Chrysler Automobiles N.V. (NYSE: FCAU) saw its short interest surge, just not enough to lift it into the top 10 — at least not yet.

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